by Susan Davis, USA TODAY

by Susan Davis, USA TODAY

WASHINGTON - The latest partisan battle in slow-moving negotiations to avoid the end-of-year "fiscal cliff" hinges on the debt ceiling and whether Congress should cede its role to the president in authorizing the U.S. government to increase its borrowing limit.

"Look, the only way we ever cut spending around here is by using the debate over the debt limit to do it. Now the president wants to remove that spur to cut altogether," said Senate Minority Leader Mitch McConnell, R-Ky. "I assure you: It's not going to happen."

The hardening positions on the debt ceiling are in addition to Democrats' stance that there can be no agreement unless individual tax rates rise on the top 2% of earners. Republicans continue to oppose higher tax rates and are instead proposing new revenue with a tax code overhaul. The two issues are stalling negotiations, which both parties called gridlocked this week.

In his initial plan to cut deficit spending by $4 trillion over 10 years, President Obama included a request to essentially end the requirement that Congress vote in favor of any request to increase the nation's borrowing limit. The debt ceiling does not authorize new spending. It is the money required to meet existing obligations on items such as Medicare benefits, military salaries and tax refunds.

White House spokesman Jay Carney reiterated Obama's position that no final "fiscal cliff" deal is possible without a debt ceiling resolution. "We believe that dealing with the debt ceiling ought to be part of this end-of-the-year package. It ought to be done without delay and without drama," he said.

The $16.4 trillion debt ceiling is expected to hit its limit in mid-February. Obama, backed by congressional Democrats, wants to remove forever the threat of default as part of separate negotiations around the cliff. That is the combination of the Dec. 31 expiration of the George W. Bush-era tax cuts and the Jan. 2 triggering of $1.2 trillion in spending cuts over 10 years that threaten to force the economy back into a recession if they occur unaltered.

Obama's proposal roils Republicans who view it as a rare leverage point to extract spending cuts from Democrats. Under House Speaker John Boehner, R-Ohio, the party has embraced an informal rule that any debt ceiling hike must be accompanied by an equal or greater amount of cuts. Republicans used that principle in a 2011 deal on the debt ceiling to achieve $1.5 trillion in spending cuts, according to the latest analysis from the Center on Budget and Policy Priorities.

But that battle also rattled financial markets and resulted in a Standard & Poor's credit downgrade. The Bipartisan Policy Center released a report last month that estimated the debt ceiling battle also cost the U.S. economy $18.9 billion due to higher interest rates related to the fight.

Allowing the debt ceiling to become a perpetual political battle could wreak havoc on the U.S. economy, Moody's Analytics Chief Economist Mark Zandi told the Joint Economic Committee Thursday.

"In terms of the debt ceiling, that at minimum needs to be increased until the other side of the election, and it would be nice to extend it past the next presidential election, and it'd be even nicer than that to get rid of it altogether," Zandi said.

The United States should not "default on the debt under any circumstance," testified Kevin Hassett, a senior fellow at the conservative American Enterprise Institute. But, he added, "there's a long history of especially parties out of power using that debt limit as a moment to extract concessions from the party in power."

McConnell made clear Thursday that Republicans will fight ceding congressional authority on the debt ceiling. "We're happy to have (that fight)," he said.